Extreme heat creates new winners in India’s FMCG basket

Mumbai: Indian households have been coping with this year's extreme summer heat by consuming more electricity, water and cooling, leaving less room for some foods. Among households at peak heat risk, chocolate consumption fell 10% in the June quarter from a year earlier, while milk and food drinks declined 8% and butter and cheese 7%, according to Worldpanel by Numerator (Kantar) data shared exclusively with ET.

About 88% of households reported additional summer-related expenses in the March-June period, while 73% said their grocery budgets were affected. The impact was sharpest among peak-risk households, with 82% reporting severe pressure on grocery budgets, compared with 68% of moderate-risk and 64% of low-risk households.

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The trend is visible in company sales. Dabur chief executive Mohit Malhotra said its glucose business bounced back after April, with growth accelerating in May and June.

"Glucose is a business that bounced back after April. In May and June, we saw mid-teens growth and high-teens growth, both in Glucose and juices. So, I think season plays a very big factor," Malhotra said, adding that out-of-home glucose consumption was particularly strong in rural areas of Bihar, West Bengal, Odisha and the Hindi belt.

Dabur's 100% juices grew about 45%, coconut water about 70% and its fizz portfolio 30-35%, Malhotra said. Overall food and beverage growth was about 8%. "It is a season which plays havoc," Malhotra said.

Hindustan Unilever chief executive Priya Nair said the company was working to make some beauty categories less dependent on seasonality. "We have put in place measures like de-seasonalising of moisturisation, democratisation of sunscreens, all the areas that we have called out in our beauty categories for which we are developing the market," Nair said.

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Extreme heat is also creating demand for a different set of products. FMCG consumption excluding wheat among peak-risk households grew 8-9% during extreme-summer periods, significantly ahead of lower-risk groups.

"Almost 39% of Indian households actually live in this peak risk cohort, which means about 132 million households, which is big enough to move the needle for the overall FMCG industry as well," said Manoj Menon, director, commercial, Worldpanel by Numerator, South Asia.

The opportunity for FMCG players is to recognise this shift from a seasonal spike to a broader summer-adaptation need. Winning the extreme-summer shopper will require brands to make their portfolios more affordable, relevant and accessible, while understanding where consumers are trading up, down and creating new shopping occasions, he added.

The shift is particularly visible in hydration and personal-care categories. The share of peak-risk households consuming sugarcane juice was 35 percentage points higher than among low-risk households, while buttermilk and lassi were 23 points higher and fresh milkshakes 10 points higher. Cold coffee and iced beverages were 9 points higher than low-risk households.

Among packaged categories, talcum powder consumption was 13 percentage points higher among peak-risk households than moderate-risk households, while glucose powder was 8 points higher, soft drinks 7 points higher and deodorants 3 points higher. Hair-wash consumption was 4 points higher and skin-cream 6 points higher.

Emami whole-time director Mohan Goenka said its talc portfolio delivered high single-digit growth despite significant regional divergence this summer. "While the summer season was characterised by significant regional divergence, our Talc portfolio delivered high single-digit growth," Goenka said.

"With the strong summer this year we would be able to recover and go back to the '25 numbers. Last year was a low number, but this year, we are going to make up. You will see substantially high numbers in this quarter for Talcum. For the whole year, you will see significantly high numbers."